Did you know that banks prefer to lend money to particular professions? The secret to getting the best possible interest rate is to apply with the right lender!
Each lender has their own pricing strategy and they tend to cut interest rates aggressively when they want more business. However, when they are busy they are unlikely to approve a special discount for you.
Which professions are eligible?
We have made agreements with some of our lenders to offer waived LMI and interest rate discounts for certain professionals.
The professions listed below are eligible:
- Accountants (CPA preferred) including actuaries, finance managers and auditors.
- Legal professionals including solicitors, barristers and lawyers.
- Doctors, dentists, vets and optometrists.
- Mining engineers including surveyors, quantity surveyors, geologists and geophysicists.
- Other high income professionals are eligible for interest rate discounts (see below).
Speak to our mortgage brokers by calling 1300 889 743 or fill in our free assessment form to find out if you qualify for a professional discount.
Negotiated interest rate discounts
Interest rate discounts are normally expressed as a percentage below the Bank Standard Variable Rate (BSV). Normally with a standard professional package you can get a discount of up to 0.7% below the BSV without any negotiation.
By negotiating with the bank our brokers can often obtain the following interest rates:
- Loans over $250,000: 1.00% below the BSV (Special offer!).
- Loans over $500,000: 1.10% below the BSV (Special offer!).
- Loans over $1,000,000: 1.10% – 1.15% below the BSV.
- Loans over $1,500,000: 1.15% + below the BSV.
- Loans over $2,500,000: Discounts are negotiated on a case by case basis.
Please note that the above rates are a guide only. You can view some of our interest rate specials on our website however negotiated discounts are not published.
The exact discount that you can receive will depend on your profession, the amount that you are borrowing and the current funding environment. There are many factors to consider when putting in a pricing request and lenders change their special pricing levels on a weekly basis.
Which bank will give you the best discount? Speak to our team on 1300 889 743 or enquire online today to find out if you can qualify for a professional discount.
Which professions are low risk borrowers?
Banks monitor the performance of their existing customers and keep track of which professions make their payments on time, every time, and which tend to have higher rates of default on their home loans.
The lowest risk professions are:
- Government employees (federal and state preferred over local level)
- Australian Defence Force (ADF) staff (special discounts may be available)
If you work in these professions you may not be eligible for a special interest rate discount unless you are borrowing an exceptionally large amount.
Despite this, lenders are more flexible with their lending policies for people in the above professions. In other words, they want your business because they know that the likelihood of you making your repayments on time is very high.
Some professions, such as builders, are known to be a significantly higher risk than other borrowers and their loans will be scrutinised by the lenders, particularly if they are applying for a low doc loan.
If you think you fall into this category of borrower, it is best to enquire online or call us on 1300 889 743 to discuss your situation with one of our expert mortgage brokers. Depending on your circumstances we may still be able to secure you a great discount!
Are you a high income earning borrower?
Banks target high income professionals as they tend to have more in savings and seek larger mortgages. Typically, banks will offer discounted interest rates to high income borrowers due to the size of their loan and not due to their profession.
The main professions and industries that tend to have higher loan amounts are:
- Business owners
- CEOs, directors, executives and managers
- Contractors and consultants (Note: Many lenders do not accept contractors)
- Financial services professionals (income over $200,000)
- IT manager / consultant
- Manager (Income over $200,000)
- Mining industry professionals
- University Lecturers
- Other professions are considered if you have an income over $200,000
If you are seeking a special discount for a home loan based on its size alone then it must be for at least $500,000. However, you will only get special pricing from most banks when you borrow over $1,000,000.
Can high net worth borrowers qualify for discounts?
Australian banks define a high net worth borrower as someone who has net assets of at least $750,000 either here or overseas.
That being said, they often only offer special discounts to high net worth borrowers if they have net assets over $1,000,000 and a large mortgage.
The main types of high net worth customers that can seek special discounts are:
- Property investors
- Business owners
- Foreign investors
- Family groups
Did you know we have a special package for high net worth borrowers?
Experienced property investors often have total borrowings in excess of several million dollars so we are in a strong position to negotiate with the banks for a better deal. That being said investors tend to focus more on the terms and conditions of the loan and how much they can borrow rather than just the interest rate.
Interestingly, it is possible for a group of people to negotiate with a bank to receive a discount together. Not every lender can offer this type of discount and many limit it to family groups. If your entire family refinances to the one lender then it is possible to negotiate a significant discount.
We can help you negotiate a discount!
As mortgage brokers, we know exactly which banks are trying to win market share by offering special discounts and which lenders are not interested in lowering their rates.
In addition to this, the banks offer us competitive discounts right away because they know that if they do not give us a good offer then another bank will!
Please enquire online or call us on 1300 889 743 and one of our mortgage brokers will give you a call to discuss which special offers you may qualify for.